Is SaaS the same as cloud?

Summary:Customers don't care what sort of cloud service it is, they just want the convenience and cost benefits. Channel players shouldn't think in terms of SaaS or cloud, they should be a trusted advisor on all aspects of cloud.

From the customer's perspective, it's all the same. If it's provided over the Internet on a pay-for-usage basis, it's a cloud service. Within the industry, we argue about definitions more than is good for us. Customers look in from the outside and see a much simpler array of choices.

Why is this important? It matters to how we market and support cloud services (of whatever ilk). Yesterday EuroCloud UK (disclosure: of which I'm chair) had a member meeting, hosted at SAP UK headquarters, that covered various aspects of the transition to SaaS for ISVs. From the title, you'd imagine it would have little content of relevance to raw cloud providers at the infrastructure-as-a-service layer. (One of our challenges in the early days of EuroCloud, whose founders are more from the SaaS side of things, is to make sure we bring the infrastructure players on board with us). But in fact, much of the discussion covered topics of equal interest at any level of the as-a-service stack: How to work with partners? How to compensate sales teams? What sort of contract to offer customers? How to reconcile paying for resources on a pay-per-use basis with a per-seat licence fee? What instrumentation and reporting of service levels should the provider's infrastructure include?

And then came the customer presentation, by Symbian Foundation's head of IT, Ian McDonald. He was there as a customer of SAP's Business ByDesign SaaS offering, whose team were hosting the meeting. But it soon became clear that his organization's voracious consumption of cloud services runs the gamut from high-level applications like ByDesign and Google Apps through to Amazon Web Services, Jungle Disk storage and file sharing (stored on either Amazon or Rackspace), even Skype. Symbian's developers still build their own website infrastructure using open-source platforms but that too is hosted in the cloud. The imperative for Symbian, as a not-for-profit consortium, is to stay flexible and minimize costs. An important part of that is having the capacity to scale rapidly if needed but without having to pay up-front for that capacity.

For Symbian, relying on the cloud for the entirety of its IT infrastructure gives the cost flexibility and agility of execution that it requires. It doesn't differentiate between infrastructure and applications as a service — what matters is that they are delivered from the cloud in a usage-based billing model.

The takeaway for industry players is that we all have to work together. Earlier in the afternoon, the meeting heard a presentation by Chrysoula Christopoulou, a long-term member of the SAP Business ByDesign team and a key architect of its go-to-market and channel strategy. SAP will be bringing live its partner strategy for ByDesign this year (it already has some beta partners working with it) and it will encourage partners to offer mashups, add-ons, integration services and other extensions to ByDesign. Indeed, SAP is planning to introduce an application marketplace (they're all the rage these days) and will be positioning ByDesign to its partners not just as an application but also as a platform.

SAP needs partners to sell ByDesign because (for the average case) the product alone doesn't produce enough margin to cover the cost of making a sale. By adding their own extensions and services, the theory is that partners can spread that cost of sale across a larger total value. I think the Symbian story demonstrates that ByDesign partners should consider casting their net wider and as well as building on ByDesign they should also offer services that bring together a complete portfolio of cloud services. Most ByDesign customers won't have the same in-house resource of smart developers that Symbian, because of the nature of its business, has on tap. Therefore there's probably a big opportunity for partners to provide that expertise as part of their service offering. Of course they still have the challenge of providing it at cost-effective prices that are more in line with the price points of cloud services — the old SI models of long-term projects and sky-high bills don't work in the cloud. The opportunity is around understanding the cloud environment and helping customers make the most of it — becoming the customer's trusted advisor as they embrace the cloud, from top to bottom.

Since 1998, Phil Wainewright has been a thought leader in cloud computing as a blogger, analyst and consultant. He founded pioneering website ASPnews.com, and later Loosely Coupled, which covered enterprise adoption of web services and SOA. As CEO of strategic consulting group Procullux Ventures, he has developed an evaluation framework t...
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Disclosure

Phil Wainewright's work as an independent consultant brings him into direct or indirect business relationships with several of the companies that he writes about, or their competitors. Phil is committed to maintaining the independent and opinionated stance that his writings are well known for and does not enter into contracts that would limit his freedom of expression in any way. However it is important in the interests of full disclosure to inform readers of those relationships so they can form their own judgement. ggRead the complete list of Phil's relationships.